Job Openings and Labor Turnover: May 2008

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

On the last business day of May, there were 3.6 million job openings in the United States, and the job openings rate was 2.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The job openings rate and total separations rate were unchanged in May while the hires rate fell. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector by industry and geographic region.

Although the month-to-month changes in job openings, hires, and turnover data are often small, the trends over time are notable. The job openings rate remained essentially flat from August 2006 through September 2007 then began trending downward, driven by decreases in manufacturing; transportation, warehousing, and utilities; and information. As the declines in these industries leveled off, the job openings rate has remained at 2.6 percent in March, April and May. The hires rate has trended downward since July 2006 and in May was at the lowest point in almost five years. The same industries that drove the decline in the job openings rate have driven the decline in the hires rate: manufacturing; transportation, warehousing, and utilities; and information. The separations rate began an overall downward trend in November 2006, driven by declines in several industries, but has leveled off in 2008. (See tables 1, 2, and 3.)

Job Openings

In May, the job openings rate was unchanged at 2.6 percent. Job openings include only those jobs open on the last business day of the month. Over the month, the job openings rate changed significantly only in the government sector where it rose. Since the series began in December 2000, three industries consistently have had higher job openings rates than the other industries: accommodation and food services (3.7 percent in May), education and health services (3.4 percent), and professional and business services (3.2 percent). (See table 1.)

Over the year, the job openings rate (not seasonally adjusted) did not rise significantly for any industry or region. The rate fell over the year for total nonfarm (to 2.7 percent) and total private (2.8 percent) as well as in several industries, including construction (1.9 percent); durable goods manufacturing (1.6 percent); nondurable goods manufacturing (2.0 percent); wholesale trade (2.4 percent); transportation, warehousing, and utilities (1.8 percent); information (2.1 percent); finance and insurance (2.0 percent); and educational services (1.7 percent). Regionally, the job openings rate fell over the year in the South (2.9 percent). (See table 5.)

Hires

The hires rate decreased significantly to 3.1 percent in May, the lowest point since June 2003. Hires are any additions to the payroll during the month. After four months of no significant over-the-month changes in any industry, the hires rate fell in May for total nonfarm (to 3.1 percent), total private (3.5 percent), construction (4.1 percent), and trade, transportation, and utilities (3.2 percent). As occurs nearly every month, the seasonally adjusted hires rate was highest in May in accommodation and food services (6.4 percent) and lowest in state and local government (1.6 percent). (See table 2.)

From May 2007 to May 2008, the hires rate (not seasonally adjusted) did not increase significantly in any industry; the rate decreased significantly for total nonfarm (to 3.6 percent) and total private (4.0 percent), and in durable goods manufacturing (2.0 percent), nondurable goods manufacturing (2.9 percent), wholesale trade (1.9 percent), retail trade (4.2 percent), information (1.6 percent), and finance and insurance (2.1 percent). Regionally, the hires rate fell over the year in the Midwest (3.7 percent) and South (3.6 percent). (See table 6.)

Separations

The total separations, or turnover, rate was unchanged at 3.2 percent in May. Separations are terminations of employment that occur at any time during the month. Over the month, the separations rate decreased in retail trade (to 4.0 percent). The seasonally adjusted separations rate was highest in May in accommodation and food services (6.0 percent) and lowest in state and local government (1.2 percent). From May 2007 to May 2008, the total separations rate rose in construction (5.2 percent), educational services (3.3 percent), and other services (4.1 percent). The rate fell over the year in retail trade (4.0 percent), information (1.6 percent), finance and insurance (2.1 percent), health care and social assistance (2.3 percent), the federal government (1.9 percent) and the South region (3.5 percent). (See tables 3 and 7.)

Total separations include quits (voluntary separations), layoffs and discharges (involuntary separations), and other separations (including retirements). The quits rate, which can serve as a barometer of workers’ ability to change jobs, was little changed in May for total nonfarm (at 1.7 percent) and has been stable since November 2007. The quits rate decreased in May in education and health services (to 1.2 percent) and in state and local government (0.6 percent). As has occurred every month since the series began in December 2000, the seasonally adjusted quits rate was highest in the accommodation and food services industry (4.2 percent) and lowest in state and local government (0.6 percent). (See table 4.)

From May 2007 to May 2008, the quits rate (not seasonally adjusted) fell for total nonfarm, total private, many of the industries, and three of the four regions. The industries in which the quits rate fell over the year were: natural resources and mining; durable goods manufacturing; nondurable goods manufacturing; retail trade; transportation, warehousing, and utilities; finance and insurance; health care and social assistance; federal government; and state and local government. The three regions in which the quits rate decreased over the year were the Midwest, South, and West. The quits rate did not rise significantly in May in any industry or region. (See table 8.)

The other two components of total separations—layoffs and discharges, and other separations—are not seasonally adjusted. For May, the layoffs and discharges rate (1.2 percent) and level (1.6 million) were both higher than a year earlier. The layoffs and discharges rate increased significantly in construction, educational services, other services, and the Northeast region; the rate fell for the federal government. The layoffs and discharges rate in May 2008 was highest in construction (3.1 percent) and arts, entertainment, and recreation (3.2 percent) and lowest in federal government (0.4 percent). The other separations rate (0.2 percent) and level (269,000) were little changed in May from a year earlier. As usual, the highest other separations rate in May 2008 was for the federal government (0.8 percent). The other separations rate for most of the other industries range from 0.1 to 0.3 percent each month. (See tables 9 and 10.)

The total separations rate is driven by the relative contribution of its three components (quits, layoffs and discharges, and other separations), with quits contributing the largest portion. The percentage of total separations attributable to quits has risen and fallen over time. The proportion of total separations due to quits (seasonally adjusted) rose from a post-recession low of 50 percent in December 2003 to a high of 61 percent in December 2006 before trending downward again. In May 2008, quits accounted for 54 percent of total separations. The proportion of separations attributable to quits has varied the most over the life of the series in the construction industry (varying from 26 percent to 55 percent) and in the Northeast region (varying from 39 percent to 65 percent). The proportion of separations attributable to quits varies widely by industry with the highest proportion regularly occurring in the accommodation and food services industry (71 percent in May) and the lowest proportion regularly occurring in the construction industry (30 percent in May). (See tables 3 and 4.)

Flows in the Labor Market

Several industries consistently have high rates of both hires and separations. These include construction; retail trade; professional and business services; arts, entertainment, and recreation; and accommodation and food services. In the 12 months ending in May 2008, these 5 industries produced 32.5 million hires and 31.6 million separations. Therefore, these five industries accounted for 58 percent of total nonfarm hires and 59 percent of total nonfarm separations while comprising only 40 percent of total nonfarm employment.

For additional information, please read the Technical Note or visit the JOLTS Web site at http://www.bls.gov/jlt/. Additional information about JOLTS also may be obtained by e-mailing Joltsinfo@bls.gov or by calling (202) 691-5870.

The Job Openings and Labor Turnover release for June 2008 is scheduled to be issued on Tuesday, August 12.